If Your ERP System Overcome These Three Distribution Challenges.jpg

Imagine this scenario: you shop for a product online, order it and then you wait…and wait. Your product takes just over a week to reach you, and you counter with delight when it arrives. It’s amazing that you received your item so quickly and to your door as well. It would’ve taken your local store a month to wait for its next shipment.

This seems ludicrous today, but it’s exactly how D2C shipping used to work and it wasn’t all that long ago, either. It shows just how much stuff has changed.

Imagine receiving that standard of service today. As the first, then the second day goes by, you’d wonder whether to get in touch to find out what’s going on. Has the company forgotten about you? Surely, they should’ve shipped it by now. You check your emails to see if there’s a confirmation. Nothing.

At this point, chances are you’d purchase the same product from a competitor who can get it to you quicker and cancel the original order. The first company loses out because they weren’t fast enough, and  more likely than not they’ll be asking questions about their distributor. In direct-to-consumer shipping, speed is everything and it’s all driven by consumer demand. People want their packages sooner than ever, creating some major challenges for distributors.

The days of having a week or more to fill orders are gone. In just three years, the average time from order placement to delivery has dropped by 60%. Additionally, on top of an unprecedented increase in e-commerce volume (roughly seven in ten Millennial prefer to shop online), more than 60% of consumers are willing to pay for the convenience of same-day delivery.

High-speed fulfillment has become the new normal, and that makes life more than a slight interesting for distributors – who often have a 24-hour shopping window to meet. Here are the three key reasons why you have to find new ways of effective more efficiently:

1.    Faster processes mean more mistakes

It’s not that the process involved has changed; it’s that it’s suddenly become a lot more intense.

For example, a key part of fulfilling an order is making sure the right products go out in the right packages. This is already a labor-intensive process but achieving it for a greater number of orders in less time makes it even more difficult, increasing the potential for mistakes. Get it wrong and you not only negatively impact customer satisfaction, but you also increase the time spent handling items when they’re returned to correct an order. This cuts into your profits even before you deal with the potential for the precious chargeback from the retailer.

2.    Order volume and complexity is increasing

Another challenge that distributors face due to the demand for direct-to-consumer shipping is an increase in order volume. Before you might have dealt with hundreds of bulk orders direct to the retailer’s distribution center, now you’re looking at thousands of small, individual orders shipped directly to the customer.

3.    Compliance is becoming more difficult

Maintaining compliance is also a growing concern for retail distributors trying to meet the rising demand for high-speed fulfillment. Vendors continue to increase chargeback fines, leaving you exposed – with some retailers even counting these fines as up to 13% of their account revenue.

A common issue you might have to deal with is branding. When working for a major retailer, they expect you to dynamically customize the shipping labels and pack slips for thousands of orders to maintain their branding in the eyes of customers. You’re effectively acting on behalf of their brand, and failure to meet their requirements often results in chargebacks for noncompliance – further cutting into your margins.

Take the labeling process. An advanced ERP can brand and print shipping labels and pack slips within the solution with tracking numbers. No more portal hopping, printing and manually matching the labels and packing slips with their respective orders it’s all streamlined within the picking process. This is just one example of how an advanced ERP can reduce the complication of your operations – and the potential for mistakes.

Another thing to think about is how your ERP system integrates with EDI and WMS. lacking that integration, you’ll have little to no chance of fulfilling a high volume of orders with tight deadlines for distribution.